Paying for the pandemic

[Wizard]

You’re missing the point. It’s not about what the old did in the pandemic. The point is that the young took a huge economic hit (future taxes, job losses) to protect the old.

I get the point exactly. I do not recall when the pandemic hit that anyone said we need to protect the most vulnerable who are the old and thus we will shut down the economy for a few months. In fact they did the very opposite and exposed the most vulnerable who were relatively safe in care homes and introduced patients from hospitals without any testing of them.

I do not feel grateful to the State which apparently 'saved' me. The comments are outrageous and patronising, and I have said all I will on that matter.

Unless you believe in the weird economics of NeilW, we will need to raise taxes all round. As I have said, certainly take a look at the State pension, especially the triple lock, but it is such a politically hot potato that no one will want to do much with it. I would think that many pensioners who can afford it would not be averse to some sort of means test if that became essential.

To answer Snorvey, if the State pension were to be means tested, I suspect only a relatively small number of current pensioners would be affected and it would scarcely make a dent in the debts run up. I expect it is unlikely to happen anyway.

Dod

My bold.

They did not say it, but it was the number of deaths that triggered the lock down and those deaths were massively skewed to the elderly. So yes, whether said or not the lock down was initiated to save the lives of elderly people.

[Wizard]

Well Wizard and Spet, we will just have to agree to disagree on this one.

Dod

I am sure that is the case. But I do suggest you read the statistic produced by the ONS before making claims such as the one that most elderly people that died were in care homes. An understanding of the facts is quite important in reaching a conclusion.

[Gengulphus]

Wizard
No one has paid a cent for me, I can assure you. Your views I, on the whole, agree with, but here you are 'way off beam. I think you may well find that most of the over 60s, 70s or however you define the ancients who do not matter, were in care homes which, in the first wave, were almost entirely neglected, and not only that but had old folks from hospitals foisted upon them with no testing or anything to ensure that they were not transmitting the virus to the homes. The care homes thus produced an enormous number of deaths from the first wave in the stats.

Most elderly people that I know (sadly I am one of them) kept themselves either to themselves or took exercise where they might as well have been with themselves and at no cost to anyone.

It is outrageous and totally politically unacceptable to suggest that the older generation pay for the cost of Covid or even a disproportionate cost.

I have no problem with making the State pension means tested but it then throws up a huge amount of other stuff into the melting pot and I doubt that younger folks would end up any better off. We are in this together as was the original mantra. To try to say this one or that one was better served by it, what on earth is going on with society today?

You’re missing the point. It’s not about what the old did in the pandemic. The point is that the young took a huge economic hit (future taxes, job losses) to protect the old.

Among many others - because the main effect of everybody's sacrifices was to stop the NHS being totally overwhelmed. If it had been totally overwhelmed, all sorts of people besides the elderly would have been at risk of dying when they could have been saved if NHS services had been available - victims of accidents, women experiencing the various major problems that can occur in childbirth, those among the young and middle-aged who got a case of COVID-19 that was serious enough to require ventilation but didn't kill them because they actually got ventilation, cancer patients, etc. All of those groups were protected by the lockdown measures - imperfectly protected, yes, but so were the elderly. And since everybody is at risk of unexpectedly becoming part of some of those groups (e.g. accident victims), including over-60s like Dod101 and me who have very largely protected themselves from COVID-19 by keeping themselves to themselves, everybody was protected to some extent by the lockdown measures.

There are of course big differences between people about just how protected they are by those measures. One could try to come up with taxation rules that tried to spread the burden of taxation according to how protected one was - but any such rules would either do a very poor job or be immensely complicated (or most likely both!). And there are plenty of precedents for taxes being assessed according to ability to pay, not according to how much benefit one gets from them, starting with Income Tax and National Insurance...

Also, the young should remember that they too will hopefully be elderly in the future: if they manage to make it a principle now that people pay taxes according to what benefits they get out of the system, they may well regret doing so later!

Edit:

They did not say it, but it was the number of deaths that triggered the lock down and those deaths were massively skewed to the elderly. So yes, whether said or not the lock down was initiated to save the lives of elderly people.

I'd have said that what they did say, or at the least very strongly suggest, is more likely: that the lockdown was triggered by the rising burden on the NHS and the danger that that burden would overwhelm it.

Gengulphus

[Wizard]

Wizard
No one has paid a cent for me, I can assure you. Your views I, on the whole, agree with, but here you are 'way off beam. I think you may well find that most of the over 60s, 70s or however you define the ancients who do not matter, were in care homes which, in the first wave, were almost entirely neglected, and not only that but had old folks from hospitals foisted upon them with no testing or anything to ensure that they were not transmitting the virus to the homes. The care homes thus produced an enormous number of deaths from the first wave in the stats.

Most elderly people that I know (sadly I am one of them) kept themselves either to themselves or took exercise where they might as well have been with themselves and at no cost to anyone.

It is outrageous and totally politically unacceptable to suggest that the older generation pay for the cost of Covid or even a disproportionate cost.

I have no problem with making the State pension means tested but it then throws up a huge amount of other stuff into the melting pot and I doubt that younger folks would end up any better off. We are in this together as was the original mantra. To try to say this one or that one was better served by it, what on earth is going on with society today?

You’re missing the point. It’s not about what the old did in the pandemic. The point is that the young took a huge economic hit (future taxes, job losses) to protect the old.

Among many others - because the main effect of everybody's sacrifices was to stop the NHS being totally overwhelmed. If it had been totally overwhelmed, all sorts of people besides the elderly would have been at risk of dying when they could have been saved if NHS services had been available - victims of accidents, women experiencing the various major problems that can occur in childbirth, those among the young and middle-aged who got a case of COVID-19 that was serious enough to require ventilation but didn't kill them because they actually got ventilation, cancer patients, etc. All of those groups were protected by the lockdown measures - imperfectly protected, yes, but so were the elderly. And since everybody is at risk of unexpectedly becoming part of some of those groups (e.g. accident victims), including over-60s like Dod101 and me who have very largely protected themselves from COVID-19 by keeping themselves to themselves, everybody was protected to some extent by the lockdown measures.

There are of course big differences between people about just how protected they are by those measures. One could try to come up with taxation rules that tried to spread the burden of taxation according to how protected one was - but any such rules would either do a very poor job or be immensely complicated (or most likely both!). And there are plenty of precedents for taxes being assessed according to ability to pay, not according to how much benefit one gets from them, starting with Income Tax and National Insurance...

Also, the young should remember that they too will hopefully be elderly in the future: if they manage to make it a principle now that people pay taxes according to what benefits they get out of the system, they may well regret doing so later!

Edit:

They did not say it, but it was the number of deaths that triggered the lock down and those deaths were massively skewed to the elderly. So yes, whether said or not the lock down was initiated to save the lives of elderly people.

I'd have said that what they did say, or at the least very strongly suggest, is more likely: that the lockdown was triggered by the rising burden on the NHS and the danger that that burden would overwhelm it.

Gengulphus

Two points. The number of people admitted to the NHS were disproportionately elderly, so it is higher numbers of elderly Covid-19 cases that would have / did overwhelm the NHS. It is now generally admitted that the NHS did become the National Covid Service for a period of time in the spring and there now seems to be an acceptance that there will be more deaths for years to come, from amongst other things cancer, because of delayed diognosis and / or treatment. So the lock down did not really stop the NHS from being overwhelmed, it was anyway.

[servodude]

Two points. The number of people admitted to the NHS were disproportionately elderly, so it is higher numbers of elderly Covid-19 cases that would have / did overwhelm the NHS. It is now generally admitted that the NHS did become the National Covid Service for a period of time in the spring and there now seems to be an acceptance that there will be more deaths for years to come, from amongst other things cancer, because of delayed diognosis and / or treatment. So the lock down did not really stop the NHS from being overwhelmed, it was anyway.

I don't think you understand what overwhelmed would really look like.

But really what you're suggesting is that all people, over a given age, should pay for a national response to a problem because a relatively higher percentage of them were at risk?
Much like how pedestrians should pay for traffic calming, or children for operation Yewtree?

-sd

[absolutezero]

100 year Corona Bonds sold on the markets like all other Government debt.

Offer a nominal (0.1%) interest and they will bite your hand off given they are currently paying the British state to borrow.

[AsleepInYorkshire]

I dread the day when spreadsheets and statistics purportedly relating to a persons age or state of health dictate the way we decide how to raise taxes. Morally incomprehensible. Society is about far more than the age of those who are within. I prefer to exercise my thoughts on what I would call the bigger picture. Without accepting we are all human and can be humane and kind to each other then there's no amount of taxation or privilege that would compensate for such a loss.

AiY

[Gengulphus]

You’re missing the point. It’s not about what the old did in the pandemic. The point is that the young took a huge economic hit (future taxes, job losses) to protect the old.

Among many others - because the main effect of everybody's sacrifices was to stop the NHS being totally overwhelmed. If it had been totally overwhelmed, all sorts of people besides the elderly would have been at risk of dying when they could have been saved if NHS services had been available - victims of accidents, women experiencing the various major problems that can occur in childbirth, those among the young and middle-aged who got a case of COVID-19 that was serious enough to require ventilation but didn't kill them because they actually got ventilation, cancer patients, etc. All of those groups were protected by the lockdown measures - imperfectly protected, yes, but so were the elderly. And since everybody is at risk of unexpectedly becoming part of some of those groups (e.g. accident victims), including over-60s like Dod101 and me who have very largely protected themselves from COVID-19 by keeping themselves to themselves, everybody was protected to some extent by the lockdown measures.

...

Two points. The number of people admitted to the NHS were disproportionately elderly, so it is higher numbers of elderly Covid-19 cases that would have / did overwhelm the NHS. It is now generally admitted that the NHS did become the National Covid Service for a period of time in the spring and there now seems to be an acceptance that there will be more deaths for years to come, from amongst other things cancer, because of delayed diognosis and / or treatment. So the lock down did not really stop the NHS from being overwhelmed, it was anyway.

That's why I said "totally overwhelmed" with "totally" emboldened for emphasis, not just "overwhelmed", and why I said "imperfectly protected, yes".

Gengulphus

[Spet0789]

Wizard
No one has paid a cent for me, I can assure you. Your views I, on the whole, agree with, but here you are 'way off beam. I think you may well find that most of the over 60s, 70s or however you define the ancients who do not matter, were in care homes which, in the first wave, were almost entirely neglected, and not only that but had old folks from hospitals foisted upon them with no testing or anything to ensure that they were not transmitting the virus to the homes. The care homes thus produced an enormous number of deaths from the first wave in the stats.

Most elderly people that I know (sadly I am one of them) kept themselves either to themselves or took exercise where they might as well have been with themselves and at no cost to anyone.

It is outrageous and totally politically unacceptable to suggest that the older generation pay for the cost of Covid or even a disproportionate cost.

I have no problem with making the State pension means tested but it then throws up a huge amount of other stuff into the melting pot and I doubt that younger folks would end up any better off. We are in this together as was the original mantra. To try to say this one or that one was better served by it, what on earth is going on with society today?

Dod

Given the high degree of respect I have for most of what you say, I am very flattered that you think we agree on many things.

You say that "...I think you may well find that most of the over 60s, 70s or however you define the ancients who do not matter, were in care homes...". First, I have never said anyone in any age group does not matter. Second, based on ONS statistics you are just plain wrong in your claim. I have drawn the following figures from two reports from the ONS, the first covers deaths in April and May the second from March 2nd to 12th June this year, which covers a large proportion of Covid-19 deaths:
https://www.ons.gov.uk/releases/deathsinvolvingcovid19englandandwalesmay2020

https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/deaths/articles/deathsinvolvingcovid19inthecaresectorenglandandwales/deathsoccurringupto12june2020andregisteredupto20june2020provisional

In the first link it states at the very start that "There were 46,687 deaths involving coronavirus (COVID-19)...". Further on in the report in Figure 9 it shows the breakdown by age for England and Wales, over 90% of deaths were in the age ranges above 65. That suggests more than 42,000 deaths amongst the over 65s involving Covid-19.

In the second link, which in addition to the first covers all of March and nearly two weeks of June, the total deaths amongst care home residents involving Covid-19 was 19,394 (this includes deaths actually in the care home and of care home residents in hospitals). Of these about 3,000 were "suspected" to involve Covid-19 by the doctor issuing the death certificate, but were not confirmed.

So over a longer sample period the number of deaths in care homes was still less than half the number of total deaths amonst over 65s measured in the shorter period. So, to say "...most of the over 60s, 70s or however you define the ancients who do not matter, were in care homes..." is wrong. Most deaths amongst over 65s were actually amongst people who did not live in care homes.

As Spet has pointed out, the point is not that elderly people did things to help prevent the spread of Covid-19. The point is that younger people did at least as much, though I personally believe made much more significant sacrafices in order to help stop elderly people dying from Covid-19.

If the death rate from Covid-19 had been at the same level per 100,000 for all age ranges as it was for under 65s there would have been no lock-down, indeed we would not have noticed it in the statistics. It is the death rate in the over 65s that resulted in the need to take children out of school for 3 months, for tens of thousands (of often young people) to lose their jobs, etc., etc. Yet the burden of paying for the actions taken will fall most heavily on the younger sections of society, simply because they will be paying for it for much longer. That is why I think there should be specific action taken for the older members of society to contribute disproportionately now.

It won't happen, but it does not change the fact I think it should.

Very well put.

[servodude]

If the death rate from Covid-19 had been at the same level per 100,000 for all age ranges as it was for under 65s there would have been no lock-down, indeed we would not have noticed it in the statistics.

Imagine that the distribution of disease was random and you took no action
Do you not think you would notice all your hospitals were full?
Do you not think you would notice?
Do you not think you would?
Do you not think?
Do you?

-sd

[AsleepInYorkshire]

Paying for the pandemic

Sigh.

It pays for itself.

What we have at the moment is a great deal of saving. Those savings get stored up as Gilt purchases - which are savings instruments.

When those savings are finally spent, they cause taxation and income, which is also taxed. That income is spent, which is taxed and becomes further income which is taxed. And so on, like a stone skipping across a pond.

Do the maths for that and you'll find the tax generated by spending the savings precisely matches the savings. It pays for itself - for any positive tax rate.

There is no need to raise taxes until you run out of unemployed people to service spending from savings, and then you are doing it to head off inflation.

Remember they don't use Sterling anywhere else and therefore it all goes around in a big circle. Quite literally the aggregate total never leaves the reserve accounts at the Bank of England.

Why has the government refused to give Manchester £65m instead opting for £60m? Surely if it's a perfectly closed self full-filling environment then the amounts are meaningless?

AiY

[Loup321]

My "Something else" is something I'm quite surprised you didn't list: increase income tax rates in all existing bands, without adding any extra bands. It's just as easily done as reducing income tax rates in all existing bands has been in the past, and it makes it a widely shared burden as this really ought to be. Note I'm not saying that the percentage point increases should be the same across all bands - it's reasonable to ask the wealthy to pay more - but there should be an increase for anyone whose income is high enough that they're currently required to pay tax at all. Basically, IMHO as far as possible "we're all in this together" should be accompanied by "we all pay for this together".

I totally agree with this. That's what "Society" means. I'm a basic rate tax payer, working throughout the pandemic (in an office-based job that moved to my living room in March), not in any "at-risk" group. I count myself lucky to still have a stable job and not have health risks that mean this affects me. I even decided that I had to take my friends out for dinner in Eat Out To Help Out, because a lot of my normal frivolous spending has stopped and I didn't know what to do with my bank balance excess. My savings are still increasing faster than I can believe. I know that I will have to pay back this good fortune in the way of taxes in the not-to-distant future (I'm hoping for 22%, probably expecting higher, but also expecting an increase to the Personal Allowance).

[NeilW]

Why has the government refused to give Manchester £65m instead opting for £60m? Surely if it's a perfectly closed self full-filling environment then the amounts are meaningless?

AiY

Politics. It would cost government nothing to do that, but would give Burnham the one up over other areas and the government.

A better solution would be for the Bank of England to buy all spare labour at £10 per hour across the country and pop them on the famous "volunteer list" - and which would then replace all the other schemes. Then we can lockdown whenever Boris has one of his visions, and firms can layoff and re-hire staff as required. Completely counter-cyclical and automatic with no argy bargy required.

Dropping the state pension age to 60 or 50 would help too. It gets the most vulnerable out of the way if they want to, and frees up a lot of now scarce job positions for younger people.

[NeilW]

100 year Corona Bonds sold on the markets like all other Government debt.

Offer a nominal (0.1%) interest and they will bite your hand off given they are currently paying the British state to borrow.

Why not just use the Ways and Means account at the Bank of England?

Then anything paid to the Bank of England would come back to HM Treasury as the Bank Dividend.

If you owned a bank outright who would you borrow from? So why doesn't your government?

[dealtn]

100 year Corona Bonds sold on the markets like all other Government debt.

Offer a nominal (0.1%) interest and they will bite your hand off given they are currently paying the British state to borrow.

Really?

At what parts of the curve are "they currently paying the British state to borrow"?

You have a very interesting shape to the Gilt yield curve if you think 100 year Gilts would trade at 0.1%.

Not saying 100 year Gilts aren't an option, they are a good one, in fact. Suggest your pricing is unachievable (currently) though.

[dealtn]

100 year Corona Bonds sold on the markets like all other Government debt.

Offer a nominal (0.1%) interest and they will bite your hand off given they are currently paying the British state to borrow.

Why not just use the Ways and Means account at the Bank of England?

Then anything paid to the Bank of England would come back to HM Treasury as the Bank Dividend.

If you owned a bank outright who would you borrow from? So why doesn't your government?

Good luck with announcing you wanted to use the "overdraft facility" to fund a 100 year commitment.

[NeilW]

Good luck with announcing you wanted to use the "overdraft facility" to fund a 100 year commitment.

We announced that in April. 3 month money dropped in price afterwards - not that it matters anyway since DMO can square with the banks during the wash up if nobody wants to play.

The financial market gets what price it is given - since in aggregate they have no alternative. It's not as if they can stop holding whatever reserves are in the system. As Japan has shown for 30 years or more.

[dealtn]

Good luck with announcing you wanted to use the "overdraft facility" to fund a 100 year commitment.

We announced that in April. 3 month money dropped in price afterwards - not that it matters anyway since DMO can square with the banks during the wash up if nobody wants to play.

The financial market gets what price it is given - since in aggregate they have no alternative. As Japan has shown for 30 years or more.

The Government, DMO, nor BoE announced in April they were going to use the Ways and Means account for anything but the shortest of maturities. The only noticeable impact was in TBills, not in the Gilt market, and they continue to issue considerable paper reflecting that (and incidentally all at prices/yields determined by the Gilt market, not dictated by the issuer or any of its agencies).

[NeilW]

The Government, DMO, nor BoE announced in April they were going to use the Ways and Means account for anything but the shortest of maturities. The only noticeable impact was in TBills, not in the Gilt market, and they continue to issue considerable paper reflecting that (and incidentally all at prices/yields determined by the Gilt market, not dictated by the issuer or any of its agencies).

All prices and yields are determined by the Bank of England, which is owned by HM Treasury. Currently they are allowing them to float. Should HM Treasury instruct the Bank of England to purchase Gilts at a price, then the yield will go to the value that at price and no higher. That's how QE works. They can drain the market of interest and force up the prices.

And you have no operational mechanism to stop it. Nor can you point to one.

You only get to play in the Gilt playpen for as long as HM Treasury allows you to. Hence why the DMO is very careful in what it does so as not to affect rates and prices too much. Because it can if it wants to - as the "play or we use the Ways and Means Account" announcement showed. They never would have needed to use it given the massive surplus of reserves in the system.

Gilt issue is a monetary policy device. Nothing to do with government spending - which will happen whether Gilts are issued or not.

[dealtn]

All prices and yields are determined by the Bank of England, which is owned by HM Treasury.

Simply isn't true.